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Researchers have unearthed two previously undetected botnets that exhibit sophisticated new capabilities that could significantly advance the dark art of cyber crime.

One of them, dubbed MayDay by security firm Damballa, uses new ways to send and receive instructions to infected machines. One communication method uses standard HTTP that is sent through an organization's web proxy. That allows the malware to circumvent a common security measure employed by many large companies.

Indeed, Tripp Cox, vice president of engineering and operations at Damballa, says he's observed MayDay running inside some of the world's most elite organizations, including Fortune 50 companies, educational institutions and ISPs. (He declines to identify them by name.)

"Most malware doesn't go through the trouble of trying to discover a computer's web proxy settings and use that as a method for getting onto the internet," he says.

The botnet also uses two separate peer-to-peer technologies so zombies can stay in touch with each other, presumably as a back-up measure in case the central channel is disconnected. One protocol communicates using the internet control message protocol (ICMP) and the other uses the transmission control protocol. The ICMP traffic is obfuscated so it's indecipherable to the human eye. Damballa researchers are still working to figure out exactly what kind of information is being transported over the channel.

Up until now, the zombie army popularly known as Storm has been the 800-pound gorilla of the botnet underground. Having recently marked it's one-year birthday, it is believed to comprise about 85,000 infected machines. It was responsible for about 20 percent of the world's spam over the past six months, according to MessageLabs, which provides email and web filtering services to more than 16,000 business customers.

By comparison, MayDay and another newly discovered botnet called Mega-D have far fewer nodes, but they are worth watching for a couple reasons. For one, they are likely to get bigger over time. And for another, their increasing sophistication is a good indicator of the direction professional bot herders are headed.

MayDay has also done a good job of flying under the radar. Infected machines have a limited amount of time to connect to the command and control channel. If the time stamp is more than a few hours old, the server returns an error message, making it hard for white-hat researchers and rival bot masters to perform reconnaissance. And according Cox, the vast majority of the anti-virus products fail to detect at least some of the samples obtained by Damballa researchers. (Symantec and Sophos, in postings here and here, question Damballa on this issue.)

There's another reason why MayDay has managed to remain under cover until now: it is still relatively small. At any given time, there are only "several thousand victims" infected, according to Cox.

The smart choice: opportunity from uncertainty

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